One of the big pillars to the BofA bulls’ case is tighter expenses. This quarter, the progress looked mixed on that front.

Overall noninterest expenses for the quarter, $17.3 billion, were down 5.7% from a year earlier, but up 5.6% from the prior quarter.

The Charlotte, N.C., bank has made cost control a top priority under Chief Executive Brian Moynihan, and its cost cutting story has been talked up by analysts. Atlantic Equities Richard Staite recently said Bank of America “has by far the largest cost-cutting story with $9 billion of cost savings still ahead.”

In the fourth quarter however, a hefty litigation tab somewhat detracted from overall expense progress. Bank of America’s litigation expense was $2.3 billion, compared with $916 million a year earlier and $1.1 billion in the third quarter.

The bank’s litigation expense is likely to remain high given ongoing lawsuits like those with the Department of Justice and the Federal Housing Finance Agency, Citigroup analyst Keith Horowitz wrote in a note before Wednesday’s earnings.

Meanwhile, Credit Suisse analyst Moshe Orenbuch said the $2.3 billion litigation expense was a whopping $1.8 billion higher than his forecast. “Future earnings levels will be subject to quarterly litigation costs,” he predicts.

On a quarter-over-quarter basis, the bank’s noninterest expense is up at every single division except the global banking unit, at which expenses are flat. Still Jefferies analyst Ken Usdin says Bank of America made “good progress on the expense front”. After stripping out litigation expense and legal asset costs tied to the bank’s legacy asset servicing arm– the unit that houses so-called “bad” loans from the bank’s purchase of Countrywide– expenses increased by just $100 million versus the prior quarter, which Mr. Usdin says is “a reasonable result” given revenue growth.

The year-over-year picture is better overall, although mixed by division. Bank of America reports higher expenses in its wealth management and markets arms, which it explains as being “revenue-related costs”. Global banking noninterest expense also rises, which the bank says is primarily due to higher incentive compensation associated with the “strong performance in investment banking.”

Bank of America is able to offset these increases with a 32% expense cut from the year earlier in consumer real estate services–the arm that houses its mortgage business. Expenses in consumer and business banking division–which consist of its bread-and-butter branch banking and also makes loans to small businesses–were also lower compared with the year earlier.

Bank of America said the drop from the fourth quarter of 2012 was driven primarily by reduced expenses in legacy assets and servicing and lower personnel expense.

Like peer Wells Fargo & Co., Bank of America has been cutting jobs in response to lower demand for mortgage refinancing and shrinking portfolios of bad loans. Bank of Americas’s plan to reduce expenses includes $8 billion of cost savings related to its New BAC expense program and also reducing costs in its mortgage business. Wednesday, the bank said its New BAC and legacy assets and servicing cost cutting programs “remain on track.”

Separately, Bank of America’s Chief Financial Officer Bruce R. Thompson said more job cuts were ahead for the unit that houses its bad loans.

The bank noted that the first quarter will include about $900 million in annual costs associated with retirement-eligible compensation. It says this is in line with previous years.

On Tuesday, rival Wells Fargo reported its noninterest expense of $12.1 billion dropped about 6% from the year-earlier quarter and was flat from the third quarter. J.P. Morgan reported its noninterest expense fell about 3% from a year earlier and 34% from the prior quarter to $15.55 billion.